Question

Adam Smith applied Enlightenment ideas of reason to his economic philosophy of laissez-faire and a free market economy. Which statement below best explains his concept of natural law in the governments role in the economic lives of its citizens?

A. The government should control trade.
B. High taxes for the poor and low taxes for the rich.
C. The government stays out of business regulation to let the people operate as they please.
D. Agriculture based on tenant farming and serfdom.

Answer 1

C. The government stays out of business regulation to let the people operate as they please.

Adam Smith’s free market concept is based on limited government involvement in the market. The government should let the forces of supply and demand dictate the markets